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What Are Virtual Employees?

Key Takeaways

1. Virtual staff come in all shapes and sizes and the term ‘virtual employee’ is used to describe a range of permanently remote workers on different types of short or long term contract. 

2. There are many business advantages to employing a virtual worker or virtual team, including cost savings on office space and supplies, a bigger talent pool for recruitment, and the greater ease of offering 24/7 services.  

3. Hiring virtual workers also comes with challenges and risks that may need serious mitigation if virtual staff or teams are a longterm element of your business planning.

4. Appreciating your virtual employees is important if you want to keep them productive, engaged and happy in their work. Practicing inclusion, treating virtual staff fairly and equally, and ensuring they have the right tools and support for their job are essential.  

Introduction

In September 2021, PWC became the first in its industry to offer full-time virtual work to all client services staff, joining a series of companies who permanently expanded their remote working offer in 2020/21. Once niche, virtual employees and virtual teams are now part of “business as usual”. At the same time, there is still some confusion and misunderstanding about what the term “virtual employee” means.

Despite the COVID-19-fuelled surge in remote working, corporate management and communication practices are not yet always in line with the reality of virtual employment. With virtual working likely to rise still further, especially in sectors like tech, where shortages of specialized staff are already worrying executives, it’s time for business to get serious about virtual employees. 

To make the most of opportunities offered by virtual employees, business leaders and managers could benefit from considering some of the pros, cons and fundamental requirements around working with virtual staff.

What are ‘virtual employees’?

Essentially, virtual employees are simply workers based permanently and voluntarily in a remote location. Their workplace might be their home, a coffee shop or co-working space, or anywhere else which allows them desk space and access to high-speed internet. They are contrasted with ‘in-office’ employees and ‘hybrid workers‘, who work at least partially on the company’s premises. 

Virtual staff may be permanently employed or hired on short term contracts, whether this is as consultants, standard temporary staff, or casual workers. They might be employed directly by a company but are more often hired through a third-party recruitment expert.

The pros of hiring a virtual employee

Hiring a virtual employee carries a range of potential benefits:

 

  • Reduced costs
  • Renting office space can be expensive. Virtual employees require no desk space provision in a company’s offices, and do not increase office utility bills, insurance or other related costs. A team of virtual employees on the staff could enable a move to a smaller office and lower overall rent, or allow empty desk space to be converted into meeting rooms or used for other purposes. 
  • Greater resilience
  • Compared to permanent office-based staff, virtual employees working from home are less likely to need time off work due to domestic emergencies (e.g. emergency plumber call), transport issues or pandemic impacts.
  • Wider talent pool

  • A virtual employee could in theory be anywhere else in the world. This means that you have access to a far bigger pool of talent than when hiring for a similar job which requires someone to live in one specific area. NB You should take professional advice on tax and legal issues when employing someone working in another country.

  • You may also be able to employ someone with higher qualifications and more experience, or be able to find a specific skillset more quickly and therefore close a recruitment process faster, than if hiring for a local office site.

  • Potential round-the-clock coverage

  • If you hire virtual employees living in other time-zones (or willing to work late or early shifts), and coordinate teams effectively, you can potentially have workstreams and projects continuing around the clock. If you hire in countries with different cultural and religious traditions, your business can continue to function even during major festivals like Christmas, Eid, Midsummer or Chinese New Year.

  • This level of coverage can be particularly helpful for businesses who need to offer a 24/7 service to clients or customers and would otherwise have to pay double or triple time for locally-based staff out of normal working hours.

  • For more about payment considerations with remote or virtual employees see How to Pay Remote Employees Working Around the World.

  • Increased scalability
  • With no need to provide office space, desks etc.., and no need to recruit from a limited geographic area, virtual employees are highly scalable. This could be a major bonus if you need to increase staffing quickly in response to business growth or new opportunities.
  • Productivity
  • Productivity may sometimes be greater when working remotely/virtually. Those performing independent intellectual tasks (e.g. programmers and developers) and knowledge workers generally may be most likely to benefit from being outside the traditional office environment. This may be due to fewer distractions and disruptions, and more independence in setting the agenda and tempo of their working day to match natural concentration patterns.

The cons of hiring a virtual employee

While the benefits to hiring virtual employees are great, the challenges and risks should not be ignored:

  • Personal relationships challenge

  • The most obvious disadvantage for a virtual worker, their manager, and their colleagues, is the fact that they are never physically present. As human beings, we get to know and understand others most effectively face to face, where body language, nuances of expression and habits are easier to observe and interpret. Building relationships and rapport virtually requires more effort, more intention and great facilitating technology. 

  • Connection and mental health challenges
  • Lack of direct human contact can put virtual workers at greater risk of becoming isolated and unhappy. Managers should connect and engage their remote team regularly through virtual means (video call, phone, collaborative working tools etc..), communicating their own availability clearly, and ensuring that virtual workers feel able to disconnect and relax at the end of their working day.
  • Team building challenge
  • Physical absence and the difficulty of building personal relationships 1:1 then present a further management challenge around team-building. Managers will need to plan and shape formal and informal team-building activities carefully to include both on-site and virtual workers and ensure that both are engaged in delivering the team’s objectives.
  • Outside-the-box initiatives, such as virtual team-building games, are worth considering. 
  • Informal communication challenge

  • Never being on-site also means that virtual employees can miss out on the personal and professional benefits of overheard phone calls, corridor chat and coffee point gossip. Consequences can include virtual employees being left out of social activities (real or virtual), not learning about new developments in real time, or not picking up on new ideas and opportunities for collaborative working.

  • Managers should think about how to best build time and space for informal chat and exchange of ideas into team video calls and tools like Slack. When in doubt, over-communication of a key idea or piece of news on multiple channels is better than adding one line in an email which might easily be missed.

  • Management challenge

  • Getting the most out of virtual employees clearly depends on the competence and emotional intelligence of managers as well as the quality of a company’s IT provision. Managers of virtual employees need to ensure that their interactions with their teams are inclusive, structured and clearly communicated, enabling all team members to engage with business objectives regardless of location.

  • The COVID-19 pandemic has already disrupted the business-as-usual office-based workforce model. Businesses for whom virtual workers and teams are important should ensure that managers are trained and ready to integrate virtual staff alongside physically present colleagues on an equal footing, from onboarding, through team building, to engagement and impact.

How to show appreciation for virtual employees

Ensuring a positive employee experience is important in keeping staff productive, engaged and happy in their jobs, regardless of working location. For those used to working only with on-site teams, keeping remote workers motivated and engaged might require some creative thinking.

1. Inclusive communication and management

Inclusion starts with a little extra thoughtfulness and planning. For example, you can include virtual staff in daily routines by keeping key team conversations on collaborative working platforms or shared messaging rather than offline, by scheduling meetings as video calls by default, and by planning virtual, as well as physical, social and team-building activities.

2. Fair recognition of performance

To evaluate the performance of virtual employees fairly, ensure that you measure productivity and achievement rather than activity and hours at a desk. This is good practice anyway, but essential when you have workers out of the office and less physically visible to managers.

This might mean reviewing and updating your performance management and impact monitoring systems with metrics more relevant to productivity than activity. In some older systems, measures such as the number of hours worked or physical attendance at meetings may have been used as over-simplified proxies for productivity and engagement. In the post-pandemic world, these should be rooted out and replaced with outcome-focused indicators.

Read more about this at How to track performance in remote teams

3. Equality of status between virtual and on-site staff

Take steps to avoid development of a two-tier staff system, or dismantle any that already exist. If your virtual and on-site employees are theoretically equal in standing, make sure that this is realized in practice.

Managers should run teams and projects in a way that facilitates full participation by all regardless of location. HR leaders should ensure that performance management and promotion processes offer a level playing field to all staff, including virtual employees, paying attention to informal requirements and accessibility issues as well as formal prerequisites. 

4. Equipment, hardware, and software

When hiring permanent or long-term virtual employees, it may be in the employer’s interest to provide computing equipment and wifi connection to ensure that full value for money is received from a virtual worker’s time. Consider IT outfitting decisions carefully.

Access to collaborative working and video communication tools (e.g. Microsoft Teams, Zoom, Slack) is essential and should always be provided if you’re serious about getting a strong performance from virtual staff.  

Don’t use activity monitoring software unless strictly necessary to your business. As well as creating an atmosphere of distrust and paranoia, they may encourage activity before productivity, wasting everyone’s time.

Find out more at Hiring Remote Workers: Tips to Connect with the Best Talent

Horizons can help hire virtual employees

In the post-pandemic world, remote working is here to stay and virtual employees are very much part of business present and future. Horizons can support recruitment and management of virtual employees anywhere in the world, and fully understands the business opportunities and challenges of hiring and tasking virtual staff. Get in touch to learn more, or get a tailored quote as to how Horizons could assist your business.

Frequently Asked Questions

A virtual employee is a staff member employed remotely on a permanent basis, using technology and communications equipment and software to engage with their manager and team.  

You can hire remote employees directly, by advertising and interviewing with a fully-remote virtual job description. If hiring internationally, you should take professional HR and legal advice to ensure you understand the tax and legal implications of employing staff in non-domestic locations.

The alternative is to hire your virtual employees through an expert third party organization who will already be aware of relevant tax and legal issues and able to navigate them successfully, and may also be able to provide a full Global Professional Employer Organization (PEO) service in which they become the employer of record and deal with all HR, payroll, tax issues.

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